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According to International Monetary Fund (IMF), India's inflation is likely to hover around 2 percent in the fiscal year 2009-10. This is expected to happen on account of declining commodity prices and weakening demand resulting from economic slowdown.
In an annual review of the Indian economy, IMF said, "With commodity prices waning and demand slackening, inflation is expected to fall further to 3 per cent by March 2009 and to 2 per cent on average in 2009-10."
According to the data obtained from government sources, inflation has dropped down to 2.43 per cent for the week ended March 1, 2009 as against the IMF's March-end projection of 3 per cent.
As per the IMF data, it is believed that inflation would be somewhere around 8.8 percent for the current financial year that has seen historic rise in crude oil and commodity prices in the international market and subsequent impact on the Indian economy.
Inflation had gone up to 12.91 per cent in the second week of August last year. However, now it has been declining and the fall became sharper following the global financial meltdown triggered by the collapse of iconic American investment banker Lehman Brothers in September.
IMF has been holding Article IV consultations with the member nations annually as part of the surveillance and monitoring exercise. The Hindu
March 18, 2009
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